0322- 1 year of KORUS FTA

Is Seoul ready for changes in global trade regime?

Exactly one year ago Friday, the controversial Korea-U.S. free trade agreement, called the KORUS FTA here, went into effect. Yet government and business officials appear more relieved now, and doomsayers remain barely audible, because a number of much-feared and discussed adverse effects have yet to take their toll on domestic businesses, so far.

In contrast, the U.S. Congress and industry are abuzz with what they see as one-sided negative impacts of the bilateral free trade pact. Little wonder: over the past 11 months, America’s exports to Korea fell 2.67 percent while imports from it jumped 7.35 percent to widen the U.S. loss in two-way trade by a hefty 44 percent. To the dismay of Washington, two major sectors _ auto and beef _ fared quite poorly, too.

Does this mean Korean officials can afford to remain complacent with what they regard as “half success,” then? Hardly, especially at a time when their U.S. counterparts are busy analyzing the smaller-than-expected benefits of free trade and racking their brains for a means of recovery.

It is uncertain in this regard whether Seoul is ready for renewed market-opening pressure from Washington, particularly in the area of intellectual property rights and farm trade.

Nor can one be sure if the Park Geun-hye administration is preparing to supplement the agreement, as it vowed to do during the presidential campaigns last year, by, for instance, revising or abolishing the controversial investor-state dispute (ISD) provision, and persuading U.S. officials to recognize products made by inter-Korean joint venture firms in the Gaeseong Industrial Complex as eligible for reduced import duties. Unfortunately, for now, there appear to be only words, not actions.

The sharply different scenes in Seoul and Washington concerning the FTA’s follow-up steps are feared to turn the table around a year later.

Worse yet, the Barack Obama administration appears set to pursue arguably the most aggressive trade talks in a generation, which will encompass Europe and Asia. Korea, which has concluded FTAs with both the United States and the European Union, may experience less direct impact from Washington’s renewed trade offensive, but needs to brace itself for at least two possibilities: the reduced benefits of free trade because more competitors, such as Japan, will jump in the fray; and a relative shrinkage of its single biggest market _ China. 

If the free trade agreement between the U.S. and EU is aimed at retaking the hegemony of global economy from large emerging economies such as the BRICS, Seoul will have to work out an elaborate strategy to play both ends against the middle instead of becoming a pig in the middle.

Of course, product quality and technological competitiveness will decide final results. Yet shrewd trade diplomacy is as important as solid industrial policy. It’s quite discomforting to think how deftly the restructured Ministry of Industry, Resources and Trade will handle this complicated job. Also hard to know is where are the group of lawmakers, who vowed last year to form an FTA “study group.”

Signing FTAs is not the end, not even the end of beginning, of engaging in a trade war. The real battle has not even started yet. It’s a pity the attention of political and administrative leaders appears directed somewhere else.  

This is The Korea Times editorial for Thursday, March, 14, 2013.

0321-Unfit defense chief

President Park Geun-hye reportedly grew furious during Monday’s Cabinet meeting at the news about military officers who went golfing over the weekend. 

Golf, or most other sports for that matter, is recommended for officers as both a diversion and physical exercise. But there is a time for everything. Last weekend, the inter-Korean propaganda war was reaching its peak on the eve of the annual Korea-U.S. military drills. We are curious how the U.S. troops arriving for the joint exercise have reacted to the leisurely atmosphere among their Korean counterparts.

Park is right to instruct her aides to ferret out all those lax officers and sternly discipline them. Foreigners are often surprised at the South Korean people’s carefree attitude in the face of North Korean threats. Yet it’s chilling if such apathy to security has spread even to the military.

In a way, however, the nation’s first female president can be said to have provided a ground for loosening military discipline further _ with her nomination of the most unqualified candidate for defense minister.

Park’s nominee, former Army general Kim Byung-kwan, is unfit to be the nation’s defense chief in every way _ not just in terms of ethics and character but in capability. 

Kim, involved in scores of scandals including his post-retirement stint as an advisor for a foreign arms broker and various suspicions about real estate speculation during and after active duty, astonished people when he declared he has lived a “life of integrity.” “Of all the investments in properties, I only succeeded in two cases,” he added. We are left to wonder whether he is senselessly candid or has long forgotten such a thing as shame. 

Even more pitiably, Kim played golf a day after the South Korean frigate Cheonan sank off the West Sea with 46 sailors aboard in March 2010, and went on a spa tour of Japan in the wake of the North Korean shelling of Yeonpyeong Island. Kim said there was little he could do as a retired general but then he should have done nothing, instead of seeking pleasure. Once a general should always be a general, whether in uniform or not.

The military is an organization that lives on honor, respect and trust. We doubt Kim can evoke any of these among his men. 

On Tuesday, Kim repeated his request to allow him to serve the nation once again. If his brazen-faced appeals were on cue from his appointer, Koreans have every reason to feel uneasy about the nation’s defense. 

And if the president pushes ahead with her appointment of Kim only because he is loyal to her and her deceased parents, people will find an additional reason for feeling restless not only about security but about overall  state administration in the next five years. 

This is The Korea Times editorial for Wednesday, March, 13, 2013.

0320-Opposition in disarray

Democrats should rebuild party on clearer platforms

If there is a political group more deplorable than the stubborn president and her submissive governing party, it is the disjointed main opposition party.

President Park Geun-hye apparently thinks her election victory gave her a blank check for running state affairs, restructuring the government and nominating Cabinet ministers without consulting even her own party, let alone seeking the opinions of opposition leaders.

The ruling Saenuri Party dares not raise a protest of Park’s arbitrary governance style even when her aides reverse their words on major campaign pledges without showing any signs of regret for voters.

Yet it is the main opposition Democratic United Party (DUP) that bears the brunt of popular criticism of this administrative logjam by appearing to play the role of obstructionists. We don’t think the DUP is opposing the president’s various agenda for opposition’s sake. If a considerable number of people see the largest opposition party as an unproductive obstructer, however, it should ponder why.

The biggest reason is the factional strife over responsibility for the election loss and party hegemony without genuine reflection on what has gone wrong. It is small surprise then that the DUP is at an utter loss how to deal with Ahn Cheol-soo, an ally-turned-rival who went to the United States on the voting day and returned Monday, nearly three months later.

Ahn, who conceded candidacy in the presidential election to DUP candidate Moon Jae-in just before the poll, said at the airport he would no longer go with the DUP but take an independent political course, probably by forming a new party. The IT guru-turned-college professor-turned-politician, who stirred a whirlwind with his slogan of ``new, clean politics” last year, still enjoys considerable popular support, especially because the existing parties are mired in political gridlock over almost every issue.

We can hardly agree with Ahn’s political opportunism. His concession of the candidacy was hardly spontaneous and he should have stayed in Korea reflecting on the liberal opposition’s defeat and analyzing its reasons instead of flying to the U.S. as an escape. This is not the 1970s and 80s when civilian political leaders went into self-imposed exile to avoid military dictators’ persecution. Ahn is planning to run in a by-election in a Seoul precinct vacated by a progressive lawmaker’s conviction, for an easy comeback.   

Most political analysts say that in the last presidential election, voters, although they were disillusioned with President Lee Myung-bak’s dismal governance of five years, opted for stability instead of the populist demagoguery of liberals in the preceding 10 years.

As this page has repeatedly said, however, the biggest mistake of liberal governments was not their pro-working class policies but their failure to implement them with concrete, and consistent, actions.

As expected, Park and her Saenuri Party are showing most of their welfare policies were not meant for implementation but just vote-getting decoys. What the oppositionists should do is to force the ruling camp to keep their promises, not split into shreds against a united conservative party.

It’s time for the opposition to unite and jointly agonize over what is best for Korea’s political development and the liberals’ most proper contribution to it.

This is The Korea Times editorial for Tuesday, March, 12, 2013.

0319-A beautiful retirement

A former Supreme Court justice is now working at a corner shop run by his wife: “So what?” people in some advanced countries might ask.

But not in Korea, where ex-judges of even lower ranks can earn up to one million dollars a year working for large law firms, which exploit their personal connections with former colleagues to bend trial results.

The so-called “special treatment of ex-officials” is so widespread here that high offices have become like licenses on which to build a fortune.

So the local media’s loud coverage of Kim Neung-hwan, while natural given the journalists’ pursuit of something unusual, and laudable as offering a model for other officials, is a sad reminder of how Korea has become a society that worships money and little else. 

Kim, who also served as the chief of the National Election Commission of Korea, has left many good examples of what a public official should be. He gave part of his salary to fund events for subordinates and even helped to finance a staff member’s court costs. As the top election manager, Kim didn’t hesitate to ferret out ruling Saenuri Party violations, earning the ire of the latter.

A man of high integrity and faith, Kim reportedly received an offer to be President Park Geun-hye’s first prime minister but turned it down, saying, “How can a former justice and ex-election manager work for the executive branch (that I once checked and oversaw)?” 

That such a natural stance makes big news only indicates, yet again, how far this society has moved away from a normal one. A man of extreme humility, Kim, who kept his wife from running stores while he was in office, even rejected teaching jobs at universities, saying, “I don’t want to commit a sin on students with my poor ability.” 

By any standards, Kim is a rare person. Park may try again to recruit him for her administration and he may, or may not, accept the offer, to set another example for other public officials. But we hope Park will leave him alone, as a guiding light for this ever-darkening society as a whole.

This is The Korea Times editorial for Monday, March, 11, 2013.

0318-Reducing temp workers

Retail giant E-mart’s decision to convert 10,000 temporary workers into permanent staff may be the best news that the labor market has heard in years. And it shows how much difference one president can make for so many workers.

The move by the nation’s largest discount chain came right after the labor ministry ruled that the retailer hired and used 1,978 workers dispatched by a referral agency in illegal ways, and threatened to impose fines of 10 million won per worker each month until it rectifies the irregularity.

This is the same labor ministry which looked the other way when the same company oppressed unionists over the past five years under a different President. The conversion is a belated but welcome move but the government’s auditors should investigate allegations that the ministry also knew but ignored the unlawful hiring practices for years.

Also noticeable is that the Shinsegae Group came up with the decision following a similar one taken by Hanwha Group, another family-controlled conglomerate. The two chaebol groups have one thing in common: their owners have either been convicted or are under police probes for financial and labor-related violations. Few Koreans doubt that the tycoons’ troubles are related with President Park Geun-hye’s strong policy to tame chaebol.

We hope President Park will continue to keep her pledge not to allow any exception from fair and equal enforcement of the law. She should not follow in the footsteps of her predecessors, most of whom started with anti-chaebol policies but ended up compromising with the corporate behemoths, which together account for more than half of Korea’s gross domestic product. If only she can make the industrial giants faithfully abide by the law, numerous smaller firms will breathe far more easily.

E-mart’s latest move will incur additional labor cost of 60 billion won a year, or 7.7 percent of its net profits of 776 billion won, while raising its employees’ annual income by 27 percent. This is a worthy investment because the workers are certain to repay with corresponding productivity growth and improved work discipline.

Corporate use of temporary workers and dispatched labor is a universal trend to meet with rapidly changing industrial climate. So the new government’s task is to narrow the excessive income gap between temporary and permanent workers here and tighten the restrictions of this irregular employment practice by drawling a clearer line between acts that are allowable and those that are not.

The ongoing change in the domestic employment market is a move in the right direction, but is only a small beginning toward realizing President Park’s promise to make a ``happy Korea.”

0315-A vegetable government

People are biggest victims of administrative vacuum

The Park Geun-hye administration has struck a rock even before it set to sea. On the surface, current partisan strife is due to a seemingly minor provision in the government restructuring bill. Beneath this, however, is the first skirmish over political hegemony, the result of which could tilt power balance between President Park and her political opponents over the next five years.

It is not certain who will win this initial war of nerves, but in the up-and-down world of politics, today’s victory is often tomorrow’s defeat, and vice versa. What’s certain is who the invariable losers of these political dogfights are: the people.

For now, Koreans are embarrassed by this unprecedented administrative vacuum gripping the new government. When their bewilderment turns to anger, the first target will likely be the unwieldy opposition parties.

And that must be what President Park had in mind when she read her first “statement to the people” at Cheong Wa Dae Monday, only her eighth day in office. “The National Assembly’s failure to pass a bill to retool the government is causing a serious bottleneck in state administration,” a stony-faced Park said in an angry voice. “We cannot start a new growth engine to revive economy, while losing opportunities to create good jobs.”

In theory, there is little wrong with what she said. But should this be the way the new chief executive handle national affairs in her first week in office? Park may, or may not, be able to win a parliamentary okay for the bill but if, and should, she resort to “direct appeals” to the people whenever opposition parties do what they are supposed to do _ “oppose” _ what role will the President and her party be left with? Most Koreans will shake their heads at the mere thought of such extreme partisan wrangling.

It seems as if Park, who spent most of her political career out of power, either as an opposition lawmaker or an “in-house oppositionist” in the Lee Myung-bak administration, has forgotten the natural role and situations of oppositionists as soon as she came to power little more than two months ago.

In her inaugural address, Park uttered the word “people” 50 times and “happiness” 20 times, vowing to do all she can “for” the people. What she never mentioned were such words as “democratic development” and “unity and harmony.”

To sum up, Park’s speech, which she reportedly wrote almost by herself, was asking the whole nation, including political opponents, to let her do her job, and help her, work for the people, instead of raising serious and prolonged objections.

But Koreans are living in a 21st-century democracy where the process and popular participation are as important as leaders’ good intentions and the end results of their policy. In relation to Abraham Lincoln’s famous definition of democracy, President Park seems to only think of “for the people,” while completely forgetting or ignoring “by the people.” But 48 percent of Koreans voted for opposition parties to speak and work on behalf of them in the last election.

Park must learn how to yield some and win more concessions. The sooner, the better.

This is The Korea Times editorial for Wednesday, March 6, 2013.

0314-Sharing defense burden

Despite Korea’s heavy economic reliance on America, the U.S. budget cuts known as the sequester may not affect this country much. 

This is less because the United States has given up its place as Korea’s largest export market to China, but because Seoul still believes in Washington’s ability to prevent the worst from occurring. 

That doesn’t mean, however, Korean exporters can remain complacent. They will have to prepare for any unexpected developments by diversifying shipment destinations further, bracing up for resurgent protectionism, and trying to maintain exchange rates at a proper level.

A more direct and immediate impact will be felt in another area on which the nation depends even more on its biggest ally - defense. The U.S. military spending is not only the biggest victim of the impending spending cuts but also an area subject to mid- to long-term budgetary axing. 

This is small surprise considering the two U.S. wars against terror, in Iraq and Afghanistan, are the main culprits behind its snowballing debt. It is even doubtful whether Washington’s much-heralded “pivot to Asia” would be possible financially. The sequester’s effect is expected to ripple over to the operation of existing U.S. troops in Asia, including Korea.   

In a letter sent to his soldiers on Feb. 27, James Thurman, commander of the U.S. Forces Korea, said, “If the sequester goes on for a protracted period, the Pentagon will have to give their civilian workers paid vacation.” 

Moreover, all this is coming when the two traditional allies are about to open negotiations soon to readjust their defense burden sharing for the 2014-19 period. Already, the U.S. has asked Korea to expand its share from 42 percent to 50 percent, or about 200 billion
won, meaning Seoul’s total annual burden will exceed 1 trillion won for the first time if it accepts Washington’s request.

Even more burdensome than the increase is the impression that Korea plays the role of advance guard for America’s expanded military presence in Asia, by checking China’s dominance. Especially so if and when Seoul goes on to buy expensive weapons from Washington to expand its arsenal and help ease the latter’s budget constraint.

Adding fuel to such concerns is President Park Geun-hye’s appointment of National Security Council (NSC), most of whose top posts are filled with former four-star generals. The South Korean version of the “military-first” policy could make the NSC an unbalanced organization, which has neither ability nor will to bargain with its U.S. counterparts.

At a time when Seoul has to positively cope with a new political order in Northeast Asia with farsighted and highly-sophisticated diplomacy, the military-only NSC is far more than just a cause for concern. 

This is The Korea Times editorial for Tuesday, March 5, 2013.